On this episode, we dive into the new senior exemption. Unlike overtime, tips and vehicle loan interest, this deduction from the Big Beautiful Bill hasn't gotten a lot of coverage. We break it down on this episode.

Then, we look at some items relating to the overtime deduction, including the definition of qualifying overtime, and the oddity around how the phaseout on the deduction works.

The new deduction for qualified tips isn't just for W-2 employees. Self-employed individuals can qualify, too. But there's a catch: The reporting requirements may make the deduction unavailable to many sole proprietors who receive tips.

In this episode of Accounting in the Wild, Jason Dinesen explores the surprising intersection of the Schedule 1-A tips deduction and Form 1099-K reporting.

Using practical examples involving a barber, a hairdresser and a landscaper, Jason explains:

• Why Form 1099-K plays such an important role in the tips deduction.
• The difference between payment settlement entities and third-party settlement organizations.
• Why receiving tips doesn't necessarily mean a self-employed person can deduct them.
• How the Form 1099-K reporting thresholds can prevent taxpayers from receiving the documentation they need.
• Why common workarounds, such as point-of-sale records, bookkeeping records and Schedule C reporting, may not solve the problem.
• Why W-2 employees generally don't face these same Form 1099-K complications.

It's another example of how tax law can look straightforward on the surface but become much more complicated when applied to real-world situations.

Accounting in the Wild: By a small practitioner, for small practitioners.

The new deduction for qualifying vehicle loan interest sounds straightforward enough — until the taxpayer is self-employed and uses the vehicle for business.

In this episode of Accounting in the Wild, Jason Dinesen takes a practical look at how the new vehicle loan interest deduction works when a vehicle has both personal and business use.

A key issue is whether the vehicle qualifies as a personal-use vehicle in the first place. Under the final regulations, that determination is based on the taxpayer’s intended use at the time the vehicle is purchased. If the taxpayer intends to use the vehicle more than 50% for personal purposes, it can qualify even if the actual business-use percentage later turns out to be higher.

From there, self-employed taxpayers have some flexibility. Jason walks through the regulations’ examples showing how qualifying interest can potentially be deducted entirely on Schedule 1A or allocated between Schedule 1A and Schedule C based on actual business use.

The episode also explores an important wrinkle: the $10,000 limitation applies to the Schedule 1A deduction, not to the portion properly deducted on Schedule C. That can make allocation particularly important when the taxpayer has substantial vehicle-loan interest.

Topics include:

• What makes a vehicle a qualifying personal-use vehicle
• Why the taxpayer’s intent at the time of purchase matters
• What happens when actual business use differs from expected use
• Allocating interest between Schedule 1A and Schedule C
• How the $10,000 limitation interacts with business-use interest
• Practical examples from the final regulations

For tax professionals working with sole proprietors and other self-employed taxpayers, this episode breaks down an easily overlooked intersection between a new individual deduction and familiar business vehicle rules.